Chapter VIII: The Profiteering Act, 1919

THE Profiteering Act gives power to the Board of Trade “to receive and investigate complaints that a profit is being or has been made or sought on the sale of the article which is, in view of all the circumstances, unreasonable;

“To declare the price which would yield a reasonable profit;

“And to require the seller to repay to the complainant any amount paid by the complainant in excess of such price” (Sec. 1).

Some very old doctrines of Catholic moral theology are implied in these passages of the Act. During the last century those doctrines were generally rejected by the dominant school of political economists, and in too many cases they were neglected in practice by sellers of commodities. Experience has shown once again that retribution lies in wait for those who violate the precepts of the moral law. We must either return to the teaching and observance of those precepts or we shall inevitably pay the penalty for transgressing them.

According to the time-honoured teaching of Catholic moral theology, there is a fair, reasonable, and just price for all commodities in common use. That fair, reasonable, and just price may be fixed by law, and, if it is so fixed, it is matter of conscience to keep to it in buying and selling as long as the law is not obsolete. If the price is not fixed by law, it is fixed by the common estimate of those who are acquainted with all the circumstances which affect the question. The common estimate is a moral estimate, and it does not determine the price with mathematical nicety and precision. Much depends on place and time and mode of sale, on supply and demand, as well as on the varying quality of the goods. There will generally be a higher price, more than which the article does not usually fetch. There will be a lower limit below which the price does not usually sink. And there is the mean price which lies anywhere between the two extremes. There will be no injustice done provided that the price keeps within those limits, but if they are exceeded injustice is committed and restitution must be made to the injured party. That, put very briefly, was the old Catholic doctrine of the just price of commodities.

But according to Dr. Cunningham, an authority on economics, during the last century and a half or so the world had outlived that old doctrine. It had come to see that there was no such thing as the just price of commodities. The price of things depended on supply and demand, and was fixed proximately by the higgling of the market or the competition between sellers and buyers. The sellers tried to get as much as they could for their goods, and the buyers tried to get them as cheaply as they could. That was business. It was all a matter governed by the laws of political economy, with which justice and morality had nothing to do. In this, of course, political economy was wrong. All man's actions are subject to the moral law of justice. We may indeed abstract from the moral aspects of buying and selling for the purposes of discussion, but the process is dangerous, as the instance before us shows. If political economists abstract from the law of justice, many dealers will make it an excuse for disregarding the law of justice in their transactions. It is notorious that this was done. Moralists might point out, as they did, that the higgling of the market, if buyers and sellers were honest and just, implied that there was a common standard of fairness and reasonableness by which to judge of the correct price of articles. Both buyers and sellers, if they were competent, had that standard in mind when they began to bargain. The higgling took place in order to adjust the precise sum of money which was an equivalent for the value of the article in the particular circumstances of the sale. But there were too many business people who turned a deaf ear to the moralists, and excused their profiteering with the plea that business is business.

If the Profiteering Act succeeds in forcing dealers to pay attention to the rules of justice as well as to the maxims of business, it will render a great service to the cause of morality as well as to the pockets of the consumers.

In his book on " Political Economy," C. Devas asserted that a jury of honest men could without difficulty settle what the fair price of an article should be. Section 2 of the Profiteering Act empowers the Board of Trade to set up such juries under the name of " local committees."